Inclusive Growth and the Incidence of Fiscal Policy in Mauritius: Much Progress, But More Could be Done

Abstract

Using data from three household surveys, we review whether growth in Mauritius was inclusive and discuss the incidence of public expenditures and taxes. Generally, Mauritius enjoys an even income distribution and low rates of poverty. Nevertheless, over the 2000s, despite overall progress, the benefits of growth appear to have become more skewed. Employment income is the main contributor to inequality in Mauritius. Social protection expenditures reduce poverty and inequality, but could be better targeted, particularly for pensions. Income taxes are progressive, though given their small relative weight they have a negligible impact on income distribution. The VAT appears relatively progressive compared to other developing countries, although its impact on the overall distribution is also small. With better targeting of the sizable social spending, significant further progress in poverty alleviation could be achieved.

An Investigation into the Intertemporal Spending Path of Local Government in Mauritius

“…6 The values have been compiled from the Digest of Public Finance Statistics which is an annual publication of Statistics Mauritius. All data comply with the Government Finance Statistics Manual 2001 (GFS) 7 of the IMF (David & Petri, 2013). As seen in the time series plots, both variables are trending upwards with some more visible fluctuations in local government expenditure in specific years as compared to the smoother evolution of real GDP.…”

“…Figure 2 demonstrates that the fluctuations in real local government spending have been more acute compared with changes in real GDP with sharp increases in some years and drops in others. The years post 2000 marked a period of structural transformations following the phasing-out of textile trade preferences and the loss of sugar preferences (David & Petri, 2013). A decomposition of public expenditures over the past years also indicate that the share of current expenditures on total expenditure has increased more specifically from 2008-2009 due to counter-cyclical policies to mitigate the adverse effects of the global financial crisis.…”

“…In fact, the share of expenditure on physical capital dropped both in relative terms and as a share of GDP. For some years, public expenditure has been quite volatile and current expenditures including transfers to local government dropped (David & Petri, 2013). It can be seen from Figure 3 that central government tax revenue by far exceeds local government revenue.…”

Gender wage gap in small islands: Effect of a policy framework in Mauritius

“…During the last three decades, the economy has shifted away from primary and secondary production to one with a dominant service sector. These changes in the economy are leading to changes in the labor market structure, with the country migrating from a labor‐intensive to a knowledge‐based labor market to respond to the needs of an increasingly important service sector, including finance and tourism (David & Petri, 2013; World Bank, 2015; Yao & McDonald, 2003). This trend is accompanied by an increase in demand for medium‐ to high‐skilled workers (Svirydzenka & Petri, 2017).…”

Mauritius The Drivers of Growth—Can the Past be Extended?

“…See alsoDavid and Petri, 2013, "Inclusive Growth and the Incidence of Fiscal Policy in Mauritius -Much Progress, But More Could be Done", IMF Working Paper No. 13/116.…”